Frequently Asked Questions

A broker said they have a buyer for my business, should I believe them?

Start by asking a few simple questions:

Is the “buyer” paying for your services?

You won’t expect me to compensate you, correct?

What made the buyer interested in my particular business?

What do you know about this buyer that would make them a good successor?

If the broker can’t provide acceptable and meaningful responses, watch out! If they can, there is a chance the solicitation is more than a fishing expedition to get a listing. Write down the contact information, terminate the conversation and contact a trusted advisor. Don’t get too far into the conversation without someone by your side. We, of course, would be pleased and honored to hear from you.

What should I expect from a Valuation? Do I need to get one?

Professional service providers often advise owners who are considering a sale to get a valuation. Is that good advice?

Q: What is a valuation?

A: A computational analysis of historical financial data that results in a data point or range of value for a business.

Does the fact that valuations are based on well-understood computational methods make them objective and reliable? One way to answer that question is to ask when, besides a business sale transaction, are valuations used. Two answers to that question are 1) divorce and 2) partnership disputes. I’m sure it’s no surprise . . . valuation firms often provide judges in legal proceedings wildly different assessments of value on the basis of the same data. I call these “Weaponized” valuations.

A caution every business owner should be thinking about based on the above observation . . . “beware of the motivations of the individual creating your valuation.”

A valuation firm is paid a fee for a service. Could this create a motivation to tell the client what they want to hear?

A business broker makes a living selling a small percentage of the businesses they list. Could this create a motivation to increase the valuation to get a lot of listings?

Valuations are useful tools; but, they are not the tool you need to complete a successful sale. There is more to your business story than a Valuation can convey.

Selling a business is telling a story that is substantiated by the facts. Because of this outlook, we have sold companies for several times more than a valuation expert predicted.

There is more to the Valuation story. Contact us if you want to share your story.

Is it worth fixing my business or should I just sell?

Every business story is more than a little different. Each company has arrived where it is today along a unique path, lead by a unique leader or leaders and is comprised of a unique combination of culture, resources, and people. Moreover, even in the same industry similar businesses can approach their market in completely different ways. The compounding effect of these differences are companies that are below-average, average and above average performers. Knowing the difference will determine whether your business sells and for how much.

As a practitioner and believer in continuous improvement, I can unreservedly say that every company can improve its financial and operational performance prior to a sale. This is particularly true of companies with long-term owners and employees.

If you are considering selling because you are dissatisfied with your company or you are trying to escape one or more problems you have not been able to solve, you are probably going to struggle with the sale process.

Changing the business dynamics prior to sale will:

increase the probability of sale;

may increase the total transaction value and improve the terms of sale;

may lead to a change of heart and a renewed interest in keeping the business.

At AAKEN, we commit ourselves to increasing the value of the businesses and satisfaction of the owners for whom we work. We get paid for increasing economic value. We want owners to make the right choice for them. We always want our clients to realize a multiple of return on any fees we are paid. If that kind of alignment of interest is what you are looking for in an operational consultant or mergers and acquisitions advisor, let’s have a conversation about your goals.